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LECTURE 02
CAPITALISM: Self-Interest and Society
“THERE IS NO SUCH THING AS SOCIETY!”
This is the quote and the sentiment most often
attributed to Margaret Thatcher. “There is no such
thing as society!” It fits perfectly with the idea of
her as an opponent of proper community ties; an
enemy of the values of social solidarity which are
central tenets of belief for anti-capitalists and
more generally for everybody on the left of the
political spectrum.
However, let us look more closely at what she
actually said during the oft-quoted interview with
Woman’s Own in 1987:
"I think we've been through a period where
too many people have been given to
understand that if they have a problem, it's
the government's job to cope with it. 'I have
a problem, I'll get a grant.' 'I'm homeless,
the government must house me.' They're
casting their problem on society. And, you
know, there is no such thing as society.
There are individual men and women, and
there are families. And no government can
do anything except through people, and
people must look to themselves first. It's our
duty to look after ourselves and then, also to
look after our neighbour. People have got
the entitlements too much in mind, without
the obligations. There's no such thing as
entitlement, unless someone has first met
an obligation."
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
2/13
[Margaret Thatcher, Women's Own
magazine, October 31 1987] 1
Whether you agree with her or not, it is clear that
Thatcher was not saying that people do not have
responsibilities towards each other. She was
drawing attention to the manner in which the word
‘society’ is often tossed about as an abstraction:
‘Society’ should do this, ‘Society should do that,
‘Society’ should do this, that and the other. She
was attacking an abstraction; she was not saying
that people do not have responsibilities towards
each other. On the contrary, she was saying
precisely that they do have responsibilities
towards their neighbours, but that these must rest
upon their initial or prior responsibility to look after
themselves.
In the arguments around this quote and its
widespread distortion as the supposedly Tory
slogan: “There is no such thing as society!” we
can see the manner in which anti-capitalists and
left-wing people conflate the conception of selfinterest central to right-wing or conservative or
neo-liberal thought, and the selfishness which
people on the left typically accuse capitalism of
promoting.
Selfishness or Self-interest; the distinction is not
a trivial one. The one, selfishness, extends a
moral attribute commonly associated with individual conduct or personality to an entire social
system. Namely: capitalism. The accusation of
‘selfishness’ enables the left to depict capitalism
as a social and economic system organised
around the ‘greed’ and the rapacious pursuit of
profit and the personal satisfactions of individual
1
Margaret Thatcher, talking to Women's Own magazine, October 31 1987.
See also http://briandeer.com/social/thatcher-society.htm .
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
3/13
capitalists in careless disregard of the poor and
disadvantaged. Bill Gates, media moguls, industrialists, advertising executives, bankers, and
stockbrokers are depicted as people pursuing
their own narrow interests in complete disregard
for the rest of us. They have apparently built and
sustained an entire social system upon their own
will to power and private greed.
On the other hand stands the principle of selfinterest promoted by Margaret Thatcher and
many others on the right. On this view, selfinterest as distinct from ‘selfishness’, is rooted in
profoundly conservative observations concerning
the way in which social solidarity arises within
society – Because, for the conservative or neoliberal thinker self-interest is not opposed to
society, but is, on the contrary, the basis or foundation of all cooperation within society.
This idea – the idea that self-interest is the
foundation of co-operation within society – has
one of its sources in the work of the classical
political economist Adam Smith.
With the publication of The Wealth of Nations in
1776 Adam Smith spelled out, among many other
things, his view that pursuit of self-interest was
the basis upon which all the diverse and even
conflicting interests in society were able to come
to an accommodation with each other. It was, he
argued, the pursuit of self-interest that enabled all
the different productive elements of society to
work together, and in the process to produce
outcomes beneficial to all:
[M]an has almost constant occasion for the
help of his brethren, and it is in vain for him
to expect it from their benevolence only. He
will be more likely to prevail if he can
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
4/13
interest their self-love in his favour, and
show them that it is for their own advantage
to do for him what he requires of them.
Whoever offers to another a bargain of any
kind, proposes to do this. Give me that
which I want, and you shall have this which
you want, is the meaning of every such
offer; and it is in this manner that we obtain
from one another the far greater part of
those good offices which we stand in need
of. It is not from the benevolence of the
butcher, the brewer, or the baker that we
expect our dinner, but from their regard to
their own interest. We address ourselves,
not to their humanity but to their self-love,
and never talk to them of our own
necessities but of their advantages.
[My Emphasis]2
IN THIS WAY Adam Smith was able to demonstrate that productive economic co-operation is
rooted in the pursuit of self-interest: “It is not from
the benevolence of the butcher, the brewer, or the
baker that we expect our dinner, but from their
regard to their own interest.” This is undoubtedly
true and its explanation lies in the nature of trade
(what Smith often calls ‘trucking’) and is fully
revealed in the role of the division of labour, not
merely within particular branches of manufacture
or production, but between all branches of production.
Smith makes the point that the division of labour
between the various activities required to make
something as simple as a pin is extremely
complicated. In the interests of efficiency and
enhanced production, the manufacture of any
2
Adam Smith, 1776, An Inquiry into the Nature and Causes of the Wealth of
Nations, London: Penguin Books, 1999, pp.118-119.
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
5/13
article is broken down into many separate stages;
manufacture at each separate stage is consequently greatly simplified. The workman specialises in a specific part of the process and consequently becomes much faster and more accomplished in performing his particular job. This
division of labour between the various activities
required to make a pin or any other manufactured
article leads to vast improvements in productivity
and quality.
Smith then extends this observation to the
economy as a whole. He describes in some detail
how the humble items of furniture or clothing of a
common labourer represent the most fantastic
number of different productive activities and
transactions. After enumerating all the different
trades and activities involved in making the
labourer’s coat he continues:
How many merchants and carriers, besides,
must have been employed in transporting
the materials from some of those workmen
to others who often live in a very distant part
of the country! [. . .] [H]ow many shipbuilders, sailors, sail-makers, rope-makers,
must have been employed in order to bring
together the different drugs made use of by
the dyer, which often come from the
remotest corners of the world! What a
variety of labour, too, is necessary in order
to produce the tools of the meanest of those
workmen!3
And so on, Smith goes through the smelting of
metal, the mining of coal, and the firing of bricks.
By these highly detailed but simple descriptions
Adam Smith sought to convey the complexity of
3
See The Wealth of Nations, pp.115-117.
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
6/13
what he called ‘commercial society’ and what we
know of as ‘capitalism’.
When one contemplates the complexity of the
economic relations described by Smith and of
those in which we live today the question
immediately arises how does it all work? The
motive for production is simple enough: profit.
People engage in commodity production in order
to make profits. But, how are the innumerable
different transactions and exchanges within
particular branches of commerce or industry
organised? How are the myriads of exchanges
between the different sectors of commercial and
industrial activity carried out? In a situation in
which complexity is piled upon complexity, how
does anybody know what to produce, in what
quantity, at what level of quality, and what to
charge for it?
Smith’s answer and Milton and Rose Friedman’s
answer to this question is: the market. According
to thinkers like Von Mises, Von Hayek, or Milton
Friedman, it is the operation of the market that
enables people to know what to produce, to
determine the level of quality required and the
quantity of particular sorts of goods that are
needed. More specifically, they would argue, it is
through the operation of the price mechanism that
people know what to produce.
In Milton and Rose Friedman’s example, instead
of Adam Smith’s pin manufacture, we get a
detailed discussion of the production of pencils –
ordinary pencils – in the course of which the
Friedmans are able to demonstrate the key role of
prices in communicating information throughout
the bewildering web of relationships which make
up the market. The free movement of prices
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
7/13
enables people scattered throughout the world to
calculate whether they should increase or reduce
their production or whether they should begin to
produce something else or some other entirely
different service. It is through the operation of
profit motive and the workings of the price
mechanism that pro-capitalists argue the economic activity of widely dispersed individuals is
coordinated and directed in a manner, which cannot be improved upon.
ANTI-CAPITALISTS, socialists, anarchists, communists, and those on the left more generally,
would take issue with this. They would draw
attention to the fact that because, under
capitalism, profit is the motive and price the
mechanism through which most economic activity
is determined, many goods and services which
people actually need do not get produced. They
would cite public housing, public transport, health
care, even food and clothing in many poor
countries where people are living on less than a
couple of dollars a day. In such situations,
producing a good or a service for which people
are unable to pay will produce no profit. Consequently, no matter how desperately people might
need food or housing or clothing, if they cannot
pay it will not be produced. Market forces – the
profit motive and the price mechanism – will
determine that goods and services for the
destitute or the poor will simply not be produced.
Consequently, the anti-capitalist would argue it is
absolutely essential to look beyond profits and the
operation of market values and prices when
deciding what should be produced.
THIS INVOLVES WEAKENING the distinction
between political and economic life. It necessarily
demands the insertion of what are essentially
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
8/13
political decisions into the economic process. The
state or some other representative of the
community should replace the profit motive and
the price mechanism with the decisions of state
officials or planning committees. Instead of
allowing the profit motive and the rise and fall of
prices on the market to organise production
officials are appointed who will decide what
should be made, at what quality, and in what
quantity. Now, whether this process is run by a
central dictatorial authority as in the Soviet Union
or in Maoist China, or whether it is envisaged as
being carried out by democratic trade unions,
housing associations, or grass roots community
groups the intention is similar – the radical
weakening (or even the outright abolition) of the
profit motive and the operation of market prices.
Instead of allocating resources on the basis of
prices, instead of allowing the market to
determine how much labour time should be spent
on building houses or making motor cars or
running tanning shops, the anti-capitalist option
would be to empower public officials of one kind
or another to decide what needs to be done;
public officials would decide what was produced
and how it was distributed throughout the
community. The distinction between economics
and politics insisted upon by pro-capitalist thinkers
would be abolished as all economic decisions
became in effect political decisions based upon a
rational assessment of what goods and services
society actually needs.
However, the principal problem for this anticapitalist outlook has been the abject failure of
socialists, anarchists, and communists, to put any
of this into practice. Every time socialists, anarchists and communitarians have attempted to defy
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
9/13
the logic of the capitalist market mechanisms the
utopian community or the co-operative enterprise
has either been sucked back into the capitalist
marketplace or it has collapsed in complete ruin
and failure. Time and time again anti-capitalist
attempts in the nineteenth and twentieth centuries
to build up alternatives to capitalism have failed.
THE GREAT COUNTER-REVOLUTION OF 1989
signalled the failure of the most ambitious and farreaching attempts to defy the logic of the market –
the communist economies of the Soviet Union
and Eastern Europe. Between 1989 and 1991
these regimes, in which all economic activity was
either directly run or closely controlled by the
political authorities, collapsed.
The nature of the revolutions and coups, which
resulted in the end of the Soviet Union and of her
allies in Eastern Europe, require detailed study.
As do the development of economic and political
life in Cuba or North Korea or Myanma or Iran
who all, in profoundly different ways, find themselves trying to manage economic and political life
outside (or beyond the logic of) the capitalist
market and the profit motive.
However, it is clear enough that none of these
societies offer a model of social or economic
development, which could be broadly applied with
any hope of improving upon (or even sustaining)
the material conditions made possible by the
operation of the profit motive and the working of
market prices commonly associated with fully
developed capitalist societies.
This is the sort of observation, which procapitalists have been making for the best part of a
century. In their advocacy of the pursuit of self-
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
10/13
interest and the operation of the market they have
developed a sustained critique of anti-capitalist, or
socialist, or communist ideas. As early as 1922,
barely five years after the Bolshevik Revolution,
Ludwig von Mises in his book Socialism4 argued
that without the profit motive and market prices it
would be impossible to regulate economic activity
properly. You would never really know what was
actually needed, you would never be able to
ensure the production of the quantity, or to
determine the quality required through central
planning. Ludwig von Mises argued that state or
community officials, working solely with political
decisions and fixed prices, would never have the
level of precise information required to make
effective decisions. He argued that without the
information provided by the free movement of
prices on the market socialist officials would be in
the dark; they would be unable to decide what or
how much of anything should be produced. And,
so it proved to be. The allocation of resources and
labour and the distribution of goods and services
turned out to be much more chaotic and
unpredictable in the Soviet Union than even the
capitalist marketplace. The communist state could
fight wars and send men into space; it could
manufacture large quantities of machinery, it
could build vast numbers of flats, and feed and
clothe its population, but it could only do this by
huge food imports, by switching resources
suddenly from one sector of industry to another in
a form of crisis management that made the
regulation of supplies or the sustained control of
quality virtually impossible. The political management of the economy by the party-state resulted
eventually in stagnation and in a radically demotivated population. The kind of dynamic
4
Die Gemeinwirtschaft: Untersuchungen über den Sozialismus, Jena: Gustav
Fischer, 1922.
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
11/13
development associated with successful capitalist
activity – the sort of lively development associated
with the pursuit of profit and self-interest proved
impossible or illusive for the anti-capitalist
economies.
HOWEVER, THIS EXPERIENCE of the failure of
socialism in practice has never undermined the
anti-capitalist critique. Anti-capitalists have always
regarded the failure of practical attempts to
establish socialist or harmonious kinds of social
relationships as the product of (1.) unpromising
circumstances, (2.) mistakes by anti-capitalist
movements, (3.) harsh repression, or (4.) sabotage by capitalist forces. Consequently, anticapitalists have always been able to point to the
brutal character of the capitalist system and the
heartless character of the operation of the profit
motive. Unemployment, war and famine, have
always provided them with ample evidence of the
iniquity of the capitalist system.
This ability to avoid thinking about the practical
organisation of the economy of post-capitalist
society is deeply embedded in socialist thought. It
is a central tenet of anti-capitalist belief that you
cannot know in advance, what a socialist or
anarchist society would be like – this is because
the practical details of how social and economic
life would be organised after the overthrow of
capitalism, after the revolution, if you will, is a
matter for those people in the future to decide.
And, even in the modern anti-capitalist movements practical questions of how a non-capitalist
economy might work are approached in such a
diffuse, localised, and unfocused manner as to
defy or elude any overall description.
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
12/13
AS A RESULT ANTI-CAPITALISTS have always
been able to direct their energies and attention at
the manner in which capitalist ideas or bourgeois
ideology promotes gross forms of competition
which, socialists, anarchists, communists, and
radicals in general, have always argued, work
against social harmony and against social
solidarity.
This focus upon ideological battles has often led
anti-capitalists into a critique of capitalism, which
directs attention away from discussion of practical
alternatives to the profit motive and the market
system. Insofar as profit is discussed or targeted it
is thought of as an aspect of selfishness or greed
rather than as a practical, motivating, organising
force and principle able to provide a reliable
foundation for practical economic activity.
Consequently, anti-capitalists have focused upon
a critique of competition, greed and selfishness,
which they see as inherent within the capitalist
system. However, they do not see these characteristics as in any sense ‘natural’ or as ‘natural’
expressions of ‘human nature’. On the contrary
most anti-capitalists do not see competition, greed
and selfishness, as natural at all – but rather as
negative responses produced historically by the
operation of class antagonism and capitalist
development. These negative qualities, competetiveness, greed, and selfishness, are produced by
society not by nature. Therefore, if you change
society you will change the way in which people
are able to function.
THIS KIND OF FOCUS has led most people upon
the left ignore the formal and precise arguments
of pro-capitalists. By and large anti-capitalists do
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010
13/13
not answer the criticisms of Von Mises, Von
Hayek, or Milton Friedman. They prefer to criticise
the profit motive and the market while paying
scant attention to the need for developing precise
and practical alternatives to capitalism. By and
large anti-capitalists express their aspirations for a
better future by criticising the greed and selfishness promoted by capitalism and by embracing
some form of humanism – forms of humanism in
which our capacity to act historically to transform
society are emphasised. These forms of humanism aim to bring about the transformation of
society so that the best qualities of human beings
– our capacity for solidarity, for cooperation, for
altruism, for love – can be given full expression.
NEXT WEEK, I will talk about this humanism in
relation to the emergence of the New Left and the
antecedents of today’s anti-capitalists.
Lecture 2: Capitalism: Self-Interest and Society, Level II Course,
Department of Politics and Philosophy at Manchester Metropolitan University.
© Don Milligan & Manchester Metropolitan University, 2010